Criminal Tax Problems for HSBC Customer Who Failed to File FBARs

In the latest of a string of guilty pleas related to FBAR cases, Dr. Andrew Silva, a Virginia surgeon pled guilty to one count of conspiracy to impede the United States, and to making a false statement. Several interesting points about this tax fraud case.

• Dr. Silva inherited the Swiss bank account from his mother.
• Silva failed to file a Report of Foreign Bank Account, Form TDF 90-22.1 (FBAR), but was charged with other crimes instead.
• Silva met with a Swiss attorney who managed the Swiss Bank Account, and was advised to evade the currency reporting requirements by transporting less than $10,000 at a time to the U.S. Another case of bad advice by a Swiss attorney. Attempting to avoid the currency reporting requirements is a criminal offense known as “structuring.”
• Based upon news reports it appears that the Swiss bank account was held at HSBC . Previously the reported guilty pleas have involved funds at UBS.
• When Silva was told in late 2009 his Swiss bank account would be closed the Swiss banker refused to wire the funds, instead he was given $200,000 in hundred dollar bills which he mailed back to the US in 26 separate packages. These packages were seized by customs. More tax problems exacerbated by accepting at face value the “advice” of a Swiss banker.

For his troubles Silva could be sentenced to up to 10 years in prison, and pay a fine of up to $500,000. Silva has also agreed to forfeit the currency, and pay all of the unreported tax, interest and various penalties.

This case illustrates a classic example of making a tax problem worse by attempting to conceal what has happened. While it is dangerous to speculate without knowing all of the facts it is likely that Silva’s FBAR, and tax fraud violations came to light when he mailed the currency back to the U.S. Had he made a voluntary disclosure of the funds to the IRS, and insisted that his funds be wired to the U.S. it is likely he could have avoided his criminal tax problems.